Why Are Banks Letting Criminals Steal Homes From Them?

The last several months have been extremely encouraging for real estate investors who are purchasing notes from banks!  Every day more and more judgments in foreclosure cases are coming down in the homeowner’s favor as judges become aware of the depth of fraud the banks have committed. What we are seeing in the market is more judges making the right decisions, and the banks starting to run scared of this turning tide.

Several judges across the country are clearing their dockets with surprising speed using one simple trick.  They are forcing banks to prove that they made a loan to the homeowner.  Simple, right?  All of the signed documents the banks can throw at the judge don’t matter if they can’t prove that they ever loaned money to the homeowner.  The fact of the matter is that the banks never actually loaned out any money to the borrowers.  For years judges have been taking the banks’ word that they have all of the signed paperwork from the homeowner that they need, and inferring that a loan was made, but that is starting to change.  The number of judges accepting this smokescreen, while still too large, is shrinking.

One result of this change is that banks are now offering more loan modifications in lieu of foreclosures.  Another reason for this could be that lawyers are less willing to file documents that they know are forged or otherwise fraudulent than they used to be.

Before we get too optimistic about a possible change of heart on the banks part, let’s take a look at how they are letting people steal houses from them in order to hide their own crimes…

A criminal takes note of a borrower going into default and rushes to court with fraudulent documents claiming to be the successor to whomever the borrower was paying.  The criminal then claims to be the owner of a lost note, and gets a judgment from the court that they are now the creditor.  With this judgment, the criminal can then place a credit bid on the house at the foreclosure auction.  At the auction, the criminal places a non-cash bid on the house and collects the house for free.  Next, they flip the house on the open market for a tidy profit.  The criminal doesn’t have to do this more than a few times before they’ve made a couple million dollars.

So why don’t the banks care that criminals are taking their position and stealing houses from them?  Because they are relying on the same loopholes in the law and oversights by judges in order to get their own foreclosures through the courts!  The banks don’t want the courts to start forcing them to prove that they own the note or the servicing rights because they often don’t.

Thankfully the justice department has caught onto this, and is starting to sharpen their knives to go after the bankers everyone thought were invincible.  The media might be ignoring this for the most part, but the market is not.  The stock prices and book values of the megabanks are plummeting because investors understand that a huge amount of what the banks claim as assets is worthless paper.

This is why J.P. Morgan Chase has recently agreed to pay $13 BILLION to end federal investigations into its mortgage bond sales.  This is the largest settlement a financial firm has ever paid in the history of the country.  This number is huge, but it is only part of the story.  J.P. Morgan Chase has set aside even more money to deal with lawsuits stemming from their fraudulent activities.

So what does this mean for us real estate investors?  It means we have a GIGANTIC opportunity sitting in front of us.  There has never been a better time to buy defaulted notes.  Banks are more willing than ever to sell these defaulted notes not only because it means immediate cash in their pockets, but it also takes away the possibility of a future lawsuit.

If you know of anyone with a defaulted note, you need to get in contact with my office immediately at (706)-485-0162.  I have spent the last 20 months building up a team of experienced attorneys and fraud examiners/forensic auditors who specialize in exposing exactly this sort of fraud.

We have a huge opportunity to help homeowners and do some great deals with multiple exit strategies by exposing this unbelievable and blatant fraud.  We finally have the leverage we need to get the banks negotiating on our terms.  It doesn’t matter if the homeowner has already been foreclosed on, we might be able to help.

If you would like more information on this awesome strategy, give my office a call at 706-485-0162!